Thursday, August 30, 2018

CMS released the 2017 results for the Medicare Shared Savings Program (MSSP) on August 30, 2018. Here is what they show:

The 472 Accountable Care Organizations (ACOs) in the MSSP spent nearly $1.1 billion less than their “benchmark” spending levels (the amounts CMS projected that it would spend on the ACOs’ patients in the absence of ACO actions).

CMS gave $799 million of the savings back to 162 of the ACOs in shared savings bonuses. 16 Track 2 & 3 ACOs paid penalties to CMS totaling $57 million.

The net result was that CMS saved $313.7 million on the MSSP.

Is $313.7 million a lot of savings? Hardly:

The savings amounted to only $36 for each of the nearly 9 million beneficiaries in the ACO program – that’s what the ACOs would save if half of their patients made one fewer visit to the doctor each year.

The savings amounted to only 0.33% of the total spending of $95 billion in the 472 ACOs – one-third of one percent.

The $314 million in net savings combined with the total of $384 in net losses in the first four years of the program means that CMS has yet to generate a net benefit for the Medicare program after five years of trying.

Did the ACOs that took downside risk produce more savings? No, they actually saved less:

The 39 “downside risk” ACOs only saved an average of $27 per beneficiary (0.24%).

The 433 “upside-only” ACOs saved $37 per beneficiary (0.34%).

The upside only ACOs saved 36% more per beneficiary than the two-sided risk ACOs.

The downside risk ACOs spent $254 more in total per beneficiary ($10,933) than the upside-only ACOs did ($10,679) even after they “saved” money for Medicare.

Although the MSSP program didn’t save very much overall, 93% of the savings came from the upside only Track 1 ACOs.

The experience in 2017 indicates that forcing all ACOs to take downside risk would likely produce even less Medicare savings, not more. The path to savings isn’t more risk, but a completely different approach. How to Fix the Medicare Shared Savings Program explains why shared savings, shared risk, and other risk-based population payment systems are unlikely to ever result in significant savings for the Medicare program, and it describes the kind of patient-centered payment system that CMS and other payers should be pursuing instead.